The market for antimicrobial (AM) drugs is unique in that it is associated with a positive externality (public health) as well as a negative externality (antimicrobial resistance, or AMR) (Mossialos, et al., 2010). AMR occurs when microbes change over time and no longer respond to available medicine. There are several strategies for combatting AMR, including infection control and prevention, stewardship, development of new drug targets and novel treatment approaches, improving diagnostics, developing vaccines, and development of novel AM drugs. Development of novel AM drugs is especially urgent because there are only a limited number of new AM drugs that can treat the multi-drug resistant organisms (MDROs) listed on the WHO priority list (Dall, 2021). Most new AM drugs, however, are not novel, but primarily derivatives of existing AM drugs (Blaskovich, et al., 2017). In addition, AM manufacturers face numerous challenges that have resulted in 15 out of the 18 largest global pharmaceutical companies exiting AM research and development over the last 30 years (Dutescu & Hillier, 2021).
In this report, we examine the scientific, economic, and regulatory challenges in the U.S. market that have impeded the development of novel AM drugs. Our focus is on understanding the market challenges for development of drugs that treat MDRO infections that occur in hospitals in the U.S. and are reimbursed primarily through the diagnosis-related group (DRG) system. We also investigate possible interventions to address the market challenges identified. The objective of this work is to identify new approaches to encourage development of novel AM drugs that could be explored further.